Injury has meant that Cole has not played for City since February 2006

A spokesman for Proactive Sports Management, who act as agents for the 34-year-old said it was "never the case" that such an ultimatum was made.

Former England striker Cole joined Portsmouth in August for �500,000.

Pearce claimed on City's website on Wednesday that he felt forced to sell Cole after being given the ultimatum.

"After that was suggested to me what choice did I have?" he said.

But Proactive Sports Management's spokesman said: "Manchester City had no offer on the table until very late in the 11th hour.

"When they did produce an offer it came nowhere near to matching that made by Portsmouth."

In terms of negotiations it was mentioned this deal from Portsmouth was too good to turn down Stuart Pearce

Cole had been entering the final year of his City contract and, following the interest from Portsmouth, he was offered fresh terms at Eastlands.

City ultimately accepted an initial �500,000 fee from Pompey for Cole, a sum that may double depending on the number of appearances he makes for the Fratton Park club.

Cole has been offered a two-year contract with the south-coast club.

Cole missed the end of last season after a knee ligament injury but Pearce had hoped he would be an integral member of his squad in the new campaign.

The City manager added: "In the terms of negotiations, it was mentioned that this deal from Portsmouth was too good to turn down and it might be a case of the player retiring if we did not agree to the transfer.

"That came from the agent.

"It was a bit disappointing and as soon as you hear that then you just move on and say 'right OK'. We decided, myself, the chairman and the chief executive to take the money on the player and move on."

Cole signed for City in July 2005 and scored 10 goals in 23 appearances for the club before he was ruled out for the season because of injury in February.

Pearce explained that the ex-Newcastle and Manchester United striker failed to sign a new deal that was offered to him last December.

"He wanted to go and play somewhere else."